The term “buyer” is used to designate either a buying client or a buying agent, or even the user of the auction bid system depending on the field of application of the auction. The buying client acts through its buying agent.
The buying agent can be any logical agent, such as a software agent or automaton, that is capable of implementing an automatic procedure involved in the implementation of an auction through a telecommunication network.
The term “seller” is applied to the resource seller, such as a telecommunication company, for example. The seller acts through its buying agent which can also be any logical agent, such as a software agent or automaton, that is capable of implementing an automatic procedure involved in the implementation of an auction through a telecommunication network.
The term “auctioneer” is applied to a logical mediating (or auction organizing) agent that functions as the system for managing allocation of the resource to the buyers.
There are many existing techniques for handling the allocation of resources. For example, there are mechanisms that operate based on the order of arrival FIFO, LIFO, etc. For a FIFO (First In First Out) mechanism, it is the buyers who have formulated their bids earliest who are served. For a LIFO (Last In First Out) mechanism, conversely, it is the last one to have formulated a demand who is served.
There are also other mechanisms that do not exclude any buyer. In such mechanisms, the arbitration takes place at the level of the quantity of the resource allocated to each buyer. A rule defining the quantities allocated in proportion to the quantities demanded, for example, is used as the arbitration rule.
These mechanisms are not always very efficient from an economic point of view. In fact, an appropriate match between the supply (the quantity offered and the price) and the demand (quantities desired or obtained) can be difficult to obtain.
With such mechanisms, there are off-peak periods when the demand is lower than the available quantity of the resource and peak periods when the demand greatly exceeds the available resources.
Moreover, these mechanisms are relatively static. They are not capable of adapting and remaining relevant when the supply and the demand for resources from buyers undergo steep and rapid fluctuations.
One possible solution for meeting this criterion for the economic efficiency and adaptability of the resource allocation process is to use an allocation technique based on market mechanisms, and more specifically, on auctions.
In the applications intended by the present invention, the asset being the quantity of a resource that one wishes to allocate, this asset is considered to be quantitatively divisible.
We are more particularly interested here in multi-unit auctions (the asset is divisible). The resource we are considering is composed of several units.
We are more precisely interested here in multi-unit auctions. We cite as an example the theory developed by Klemperer—(Klemperer P., Auction Theory: A Guide to the Literature, Journal of Economic Surveys, 13 (3), 227-86, 1999).
Unfortunately, most of the research done based on multi-unit auctions relates only to the theoretical properties of these auctions.
Other research deals with auctions that are generally run at the instigation of public or regulatory agencies, during which certain rare resources or rights of use have been put up for sale. An important example concerns the rights of use for radio-telecommunication frequencies: GSM or UMTS frequencies. In both cases, no concrete auction mechanism has been proposed for controlling the resource allocation process.
To date, there is only one known concrete process that addresses the problem in which we are interested.
It is an auction mechanism that will hereinafter be referred to as “PSP,” the acronym for “Progressive Second Price,” proposed and digitally tested by Nemo Semret (Semret N., Market Mechanisms for Network Resource Sharing, Philosophy Doctorate at Columbia, 1999), in the course of research for a dissertation at Columbia University in 1999. “PSP” is an auction mechanism that attempts to generalize the Vickrey principle to the case of a multi-unit resource.
By using the exclusion-compensation principle (which is the principle that underlies the self-revelation properties of Vickrey auctions) in the case of a multi-unit asset, a “player” who obtains a certain quantity of a resource pays the price that these whom he caused to lose by his presence were prepared to pay for a certain quantity of the resource. The total of this quantity corresponds at must to the quantity he has obtained. It is, of course, the “players” who have made the highest bids who obtain the asset.
The PSP auction mechanism for controlling and pricing a resource is disclosed in International application published on Sep. 28, 2000 as WO 00/57323.
The mechanism for allocating and pricing a resource defined by PSP auctions works through an iterative negotiation process among the following three types of parties:                1. The logical selling agent of the resource, which is trying to sell this resource at the best price (i.e., the price that will maximize his income and hence the highest price possible),        2. Buying agents who wish to obtain a certain quantity of this resource under the best conditions. A best condition is characterized by a pair (quantity, price) and it depends on each player.        3. The logical mediating agent (or auctioneer), whose objective is to succeed in best satisfying the two preceding parties involved.        
The role of the logical mediating agent (auctioneer) can be held by the seller of the resource.
In theory, the PSP auction mechanism does result in an equilibrium, but it has some disadvantages.
First of all, the convergence speed is not very satisfactory. Even assuming a constant number of buyers, it requires many iterations of the negotiation process to reach the equilibrium ensuring maximum satisfaction for all of the buyers.
Operationally, this convergence defect results in:
either a high volume of messages between the buyers and the auctioneer (heavy signalling traffic in the system) and many calculations performed by the buyers and the auctioneer in the case where it is decided to increase the frequency of iterations in order to reach equilibrium more quickly, or
a degradation of the process with respect to its optimal equilibrium if the frequency of the renegotiations is limited (every minute or more). The buyers cannot return any counterbids before this minimum delay.
In the case of a dynamic operation, the buyers enter and exit the system continuously. The time between two renegotiations can become on the same order of magnitude as the average time between the arrival or departure of a new buyer. Under these conditions, the iterative PSP negotiation process will never achieve the equilibrium of maximum satisfaction for the buyers. It will always be in a transitory state, possibly far from the state of optimal equilibrium.
Another disadvantage is that the PSP process as described by Nemo Semret permits buyers to form a coalition in order to pay less. It is also possible for the seller to act on the mechanism in order to maximize his income based on bids declared by the other buyers.
These two disadvantages caused by the iterative nature of the mechanism are particularly bothersome with respect to the impartiality that any auction mechanism must imperatively maintain.